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Reaffirming auto loan

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vtguy25
Contributor

Reaffirming auto loan

I have just recently purchased a new car before filing chapter 7 and the bank did not send any reaffirmation paper work to my lawyer so I am not sure if I should approach the bank and try to reaffirm or not.  Here is the other thing my dad is a co-signer on the loan so I am going to have to pay it either way because if I don't he will be responsible.  Will the payments show up on his credit report since I am still making the payments.... Not really sure what the best option for me is to reaffirm or not to well at least try to.  My loan is with Santander

Message 1 of 4
3 REPLIES 3
pizzadude
Credit Mentor

Re: Reaffirming auto loan


@vtguy25 wrote:

I have just recently purchased a new car before filing chapter 7 and the bank did not send any reaffirmation paper work to my lawyer so I am not sure if I should approach the bank and try to reaffirm or not.  Here is the other thing my dad is a co-signer on the loan so I am going to have to pay it either way because if I don't he will be responsible.  Will the payments show up on his credit report since I am still making the payments.... Not really sure what the best option for me is to reaffirm or not to well at least try to.  My loan is with Santander


The account will already be showing on his credit report, since as a co~signer he is responsible for the loan.    Any payments that are late, etc.... will negatively affect his credit score.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 2 of 4
SoulMaster
Established Contributor

Re: Reaffirming auto loan


@vtguy25 wrote:

I have just recently purchased a new car before filing chapter 7 and the bank did not send any reaffirmation paper work to my lawyer so I am not sure if I should approach the bank and try to reaffirm or not.  Here is the other thing my dad is a co-signer on the loan so I am going to have to pay it either way because if I don't he will be responsible.  Will the payments show up on his credit report since I am still making the payments.... Not really sure what the best option for me is to reaffirm or not to well at least try to.  My loan is with Santander


If you bought a new-new car, the court probably isn't going to let you reaffirm it.  It lost ~10-20% of its value when you drove it off the lot and no court (or decent BK attorney for that matter) will recommend/allow reaffirmation of underwater assets.  The court/trustee may also ask why you bought a new car right before you filed a BK, so I'd be prepared for that Q.

 

On his CR it should report as an open loan w/ accurate payment info, but it's not going to report on yours as anything other than IIB/$0.  This is usually true regardless of whether or not you reaffirm, though a reaffirmation may report as IIB/Current Balance. (There's no way to force a creditor to report anything other than that).

 

If I were in your shoes, I'd either sell the car and pay off the loan (this is what I personally would do) or get the balance down to where you can refinance it out of your dad's name.

 

Important for other readers to note:  If you're thinking of filing BK, your credit is probably shot and you're going to get screwed on any new/used car loans you apply for before the BK.  If you wait until 30ish days after your discharge to buy, you can get rates as low as 2-4%.

 

-SM

 

 

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 3 of 4
vtguy25
Contributor

Re: Reaffirming auto loan

Ok well I am stuck with this car for a little while then I am going to try and trade it in and lease within a year or two or buy something brand new because I will deff have neg equity. But I have not missed any payments and I guess at this point it doesn't really matter what it shows on my report. The trustee didn't ask anything about this either already had my meeting of the creditors.  Thanks for your posts! Smiley Happy

Message 4 of 4
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